Post on 13-Mar-2018
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Value Engineering
Kurt Lieblong, PE, CVS
Specifications & Estimates Office
Objectives
Why, What, Who, & When to VE
Review VE Job Plan (How)
Team Member & PM Roles
What is VE
Background
2011 AASHTO VE Winner
References
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Background
1947 VE Process Established
1954 Adopted by US Navy
1959 SAVE International
1970 Highway Act
1978 FDOT VE Program
1995 National Highway Systems Act
1997 Federal Regulation (23 CFR 627)
2005 SAFETEA-LU
2012 Updated Federal Regulation
What is Value Engineering?
It is not cost reduction!!!
Value Engineering is the systematic
application of function-oriented
techniques by a multi-disciplined
team to analyze and improve the
value of a product, process or
service.
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What is Value Engineering?
It is not cost reduction!!!
Value Engineering is the systematic
application of function-oriented
techniques by a multi-disciplined
team to analyze and improve the
value of a product, process or
service.
Why use VE?
Shrinking Resources
Do More with Less
Put more product on the
street
Bold, Innovative & Inspirational
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Why use VE?
Improve Constructability
Resolve Stakeholder Issues
Reduce Overall Project Costs
Improve Project Schedule
Reduce Operating Costs
Mitigate Risks
Triple Constraint
Quality
Scope
Time Cost
Project Quality is affected by
balancing Scope, Time, & Cost
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Project Management Body Of Knowledge (PMBOK)
• Five Project Management Process Groups
• Nine Knowledge Areas
9 Knowledge Areas
1. Integration
2. Scope
3. Time
4. Cost
5. Quality
6. Human Resources
7. Communications
8. Risk
9. Procurement
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9 Knowledge Areas
1. Integration
2. Scope
3. Time
4. Cost
5. Quality
6. Human Resources
7. Communications
8. Risk
9. Procurement
Areas that VE can help improve
How Can VE Help - Nine Knowledge
Areas
Improve Constructability
Resolve Stakeholder Issues
Reduce Overall Project Costs
Improve Project Schedule
Reduce Operating Costs
Time
Quality
Scope
Cost
Cost
Mitigate Risks
Risk
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VE Study
When to apply VE
Project Life Cycle
Scope/Concept Development
Design
Construction Operation & Maintenance
Opport
unity f
or
Change
When is VE Performed
Planning
• Traffic Information
• Aerial Photo
• ROW Information
• Preferred Alternative
Typical Information Required :
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When is VE Performed
• Construction Cost Estimates
• ROW Cost Estimates
• Business Damage Estimates
• Traffic Analysis
• Preliminary Plans
• Environmental Impact Analysis
• Summary of Public Involvement
Project Development & Environmental
Typical Information Required :
• Drainage Information
• Typical Sections
• Plan & Profile
• Intersection & Interchange Layouts
• Cross Sections
• Structure Info
• Traffic Control Plans
• Preliminary Cost Estimate
When is VE Performed
Design
Typical Information Required :
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When is VE Performed
Design/Build Projects
• Conducted prior to release of RFP
• Design/Build Rule – 23 CFR 627.5
Typical Information Required :
• RFP Package
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
Projects Selected for VE (What)
Major Bridges
Large Right-of-Way Purchases
Complex Projects
Large Corridor & Multi-modal Projects
Project Manager Requests
$25 million or more
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Team Selection (Who)
• Consultant
• In-house
Design
Team Leader
Maintenance
Construction
Specialized Expertise
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
5 QUESTIONS
ASKED DURING THE VE STUDY
1. What is it?
2. What does it do?
3. What does it cost?
4. What else can do it?
5. What does that cost?
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Information Phase
• Introductions
• Review Project Information
• Team briefing by design team
• Site Visit
– Video Logs
– Google Earth
Information Phase
• Review Project Information
– Discuss Design/Estimate
– Develop Questions for Design Team
• Constraints ?
• Major issues?
• What keeps you up at night?
• Significant Risks?
– Identify any missing information
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Information Phase
• Site Visit
– Meet at site and walk the site as a team
– Record any observations
– Take Pictures
• Post Site Visit
– Review Cost Model
– Areas of Review
Cost Model - Pareto
• 20% of functions contain 80% of cost
$0.00
$2,000,000.00
$4,000,000.00
$6,000,000.00
$8,000,000.00
$10,000,000.00
$12,000,000.00
Cost Model
Total Estimated Cost: $49.5 million
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How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
Function Analysis Phase
• Intent or purpose that a product or service is expected to perform.
• Expressed in 2 words, active verb and measurable noun.
WHAT DOES IT DO?
What is Function?
WHAT DOES IT DO IT TO?
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Function Analysis Phase
What is the function of this pencil?
“make marks”
Eraser:
Barrel: Band:
Paint:
Graphite:
Secure Eraser Support Lead, Accommodate Grip, Transmit Force
Remove Marks
Protect Wood, Improve Appearance
Make Marks
Function Analysis Phase
ITEM VERB NOUN
Door
Fence
Electric Switch
Screwdriver
Column
Light
Guardrail
Landscaping
Control Access
Enclose Area
Interrupt Current
Transmit Torque
Support Load
Illuminate Area
Re-direct Vehicle
Improve Appearance
Random Function Generation
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How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
Creative Phase
• A technique to get bigger and better ideas
• Free flow of creative ideas not bound by
barriers
• Challenges traditional thinking
Brainstorming
WHAT ELSE CAN DO IT?
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Creative Phase Brainstorming Rules
• Ideas flow freely
• No debating or evaluating ideas
• Build on other ideas
• Think of new ways
• Be humorous and creative
• Everyone participates
• There are no bad ideas
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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Evaluation Phase
What is It?
– Evaluate the ideas generated during the
Creative Phase
Why is it important?
– Not enough time to develop all ideas
generated during Creative Phase
Evaluation Phase
• Eliminate ideas
• Combine ideas
• Evaluate remaining ideas
– Weighted Matrix
– Team Consensus
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• Typical Criteria:
– Costs
– Operations
– Constructability
– Maintenance
– Environmental
– Aesthetics
Evaluation Phase
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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• Descriptions
• Sketches
• Calculations
• Advantages & Disadvantages
• Cost Analysis (Life Cycle Costs)
Write-up Ideas
Development Phase
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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• Present results to management
• Either last day of study or scheduled
separately by District VE coordinator
• Document results in report
Presentation Phase
How Is VE Done?
VE Job Plan Project Selection
Team Selection Pre-Study
Implementation Post-Study
Report Results
Information Phase
Creative
Function Analysis
Evaluation
Development VE
Te
am
Stu
dy
Presentation
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Report Results
Team Member Role
Fully participate during study
Review & comment study report
Review pre-study information
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Project Manager Role
Provide input during Team
Selection Phase.
Provide all available information
on the project prior to study.
Provide input during Project
Selection Phase.
Pre – Study Activities :
Project Manager Role
Be available during the week to
answer questions.
Attend team presentation of
recommendations.
Brief the team on first day of the
study.
Study Activities :
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Project Manager Role
Participate in the resolution of
recommendations.
Inform everyone involved in
the project, in writing, of all
accepted recommendations.
Post – Study Activities :
Pre-Construction Engineering >$75 M
... And the Winner is ...
FDOT – District 4
SR 710/Warfield Boulevard
2011 AASHTO Value Engineering Awards
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National Value Engineering Award
Most
Value Added
Proposal
Florida Department of Transportation
District Four SR 710/Warfield Boulevard
Pre-Construction
Engineering
$75 million or Greater
Presented by the AASHTO Value Engineering Technical Committee
September 19, 2011
For Demonstrating Outstanding Value Engineering Achievements
in Teamwork, Cost Savings, Enhanced Performance, or Expedited Project Delivery
That Resulted in an Overall Improved Project
Project Description
•PD&E Study Limits: From the Okeechobee/
Martin County Line to CR-609 (15 Miles)
•Rural Principal Arterial
•Significant Intrastate Traffic
•Significant Truck Traffic (over 25%)
•Hurricane Evacuation Route
•Connects to the Port of Palm Beach
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Existing Roadway Characteristics
•Conventionally crowned undivided 2-lane, two way roadway
•CSX RR runs parallel along entire project limit
•Roadside swale on the north serves as runoff from SR 710 and as a regional drainage system for approx. 25,000 acres. •Numerous major utilities located on north side
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Proposed Typical Sections
Cost Estimate
• Construction Cost - Typical 4E Approx $170M
• Construction Cost – Typical 4E Mod $140M (includes split bridges at RR)
• ROW – Typical 4E - $80.5M (no CSX)
• ROW – Typical 4E Mod - $43.1M
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VE Recommendations
• Move proposed future gas line out of roadway - $14.8 M
• Construct multi-use path within existing utility easement rather than acquire new easement - $2.5M
• Eliminate unwarranted illumination - $11M
• Re-use existing roadway for future EB lanes - $60M
Cost Risk Analysis/ Value Engineering
• CRA Process & VE Process are complimentary
– Use the VE process to develop risk response strategies
– Use the CRA process on the VE recommendations to evaluate the risks and their impact on the cost & schedule
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Reference
• FDOT Value Engineering Procedure 625-030-002
• VE SharePoint Site
http://fdotsharepoint.dot.state.fl.us/sites/Officeof
design/SpecsEst/ValueEngineering/default.aspx
Questions
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Thank You
Kurt Lieblong, PE, CVS
State Project Review Administrator
kurt.lieblong@dot.state.fl.us
(850) 414-4787